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Select Committee on Treasury Written Evidence


Memorandum submitted by the Gala Coral Group

EXECUTIVE SUMMARY

  i.  I Neil Goulden, as Chief Executive of Gala Coral Group, welcome the opportunity to respond to the Treasury Select Committee's inquiry into private equity.

  ii.  Gala Coral Group is Europe's largest betting and gaming group with 18,000 employees and 1,800 retail trading outlets in the UK. The group has a long history of involvement with private equity. Today the private equity firms Candover, Cinven and Permira are all invested in the group.

  iii.  The Gala Coral Group is now one of Britain's top companies, employing 18,000 people and named one of Britain's top 20 companies to work for (Sunday Times).

  iv.  Private equity provided the funds to "rescue" Gala Bingo and then invested further funds to expand and diversify the Group into what it is today. Together we have created jobs, rewarded employees, actively engaged with Government initiatives, invested in local communities and created a market leading British company of which we can all feel proud.

  v.  I have made this submission as I feel deeply upset and offended by the unjustified and ill informed publicity surrounding the private equity sector. Hopefully, the (positive) Gala Coral success story will go some way towards rebalancing those perceptions through a more informed debate.

  1.  My name is Neil Goulden and I am Chief Executive of the Gala Coral Group.

  2.  The Gala Coral Group is Europe's largest betting and gaming group with 18,000 employees and 1,800 retail trading outlets in the UK. The Group trades under the Gala Bingo, Gala Casinos, Coral the Bookmakers and Eurobet brands. The Group is valued at over £4 billion and produces an annual EBITDA (profit) of circa £400 million.

  3.  The Group was formed in 1997 following the MBO (management buy out) of Gala Bingo from Bass Plc for £235 million. The buy out was funded by PPMV (Prudential's private equity arm) and the Group has subsequently expanded both organically and by acquisition.

  4.  In 2000 ownership changed to CSFB (Credit Suisse) private equity and in 2003 to Candover and Cinven private equity, who were joined by Permira in 2005. The Group is now owned jointly by Candover, Cinven, Permira and its staff and management team (1,000 participants).

  5.  The Group has been a highly successful investment for each of its private equity owners. However, this commercial success has also benefited employees—through job creation (2,000 jobs to 18,000), promotions and share ownership—The Treasury (a significant growth in tax revenues), customers (over £1 billion invested in new and improved premises over eight years), and the wider community (Gala Coral has a very full CSR programme and we are active members of Business In The Community).

  6.  The Gala Coral Group is now one of Britain's top companies and it has an enviable record of commercial achievement linked to social responsibility. In 2006 Gala Bingo was voted one of Britain's top 20 companies to work for (Sunday Times) and we were Britain's fastest growing private company (also Sunday Times).

  7.  At the November 2006 Annual Leisure Awards, Gala Coral was voted best Betting and Gaming Company and Best Overall Leisure Group. We also won the leisure industry's coveted CSR Award for 2006 and Coral was voted Bookmaker of the Year.

  8.  The Gala Coral CSR programme is actively supported from the top of the company and our Chairman and founder John Kelly was awarded an OBE in the 2007 New Year's Honours for his services to the gambling industry, an award that I know was supported by Government Ministers. He was instrumental in the founding and funding of the Responsibility in Gambling Trust (RIGT) and under his leadership we have raised over £350,000 for "Breakthrough for Breast Cancer" and over £250,000 for the NSPCC in the last year.

  9.  The company, and my private equity investors, also support my own work within the community and I am currently Chairman of the South Central (Hampshire, Buckinghamshire, Berkshire, Oxfordshire) Ambulance Service and a member of the Low Pay Commission—both are Ministerial appointments. None of these achievements would have been possible without the positive support and encouragement of our private equity investors.

  10.  As a Chief Executive with extensive experience working with private equity firms I have been astounded by the recent bad publicity regarding the (private equity) sector. My own experience is 100% positive!

  11.  Private equity provided the funds to "rescue" Gala Bingo from a disillusioned parent company (Bass Plc) and then invested further funds to expand and diversify the Group into what it is today—one of the largest and most respected gambling companies in the world. The private equity partners who have sat on my Board of Directors over the past 6 years (16 in total) have all impressed me with both their active strategic engagement in the business, and their integrity and total commitment to our CSR programme.

  12.  Together we have created jobs, rewarded employees, actively engaged with Government initiatives, invested in local communities and created a market leading British company of which we can all feel proud.

  13.  I have made this submission as I feel deeply upset and offended by the unjustified and ill informed publicity surrounding the private equity sector. Hopefully, the (positive) Gala Coral success story will go some way towards rebalancing those perceptions through a more informed debate.

May 2007





 
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Prepared 22 August 2007